Energy Takeover Targets?

Some small U.S. exploration and production companies look ripe for consolidation. Two stocks that could rise at least 50%.

While merger activity this year has been relatively subdued, there is ample reason to expect increased consolidation among small U.S. exploration and production companies.

"I think we will see more energy deals. Doors may be closing for major oil companies, whose growth is constrained," says Bernard Picchi, a portfolio manager at Palisade Capital Management in New Jersey. "Oil-and-gas producers know they can operate...